MODERN PRODUCT DEVELOPMENT CALLS FOR NEW MANAGEMENT APPROACH

Product development and innovation in the consumer-goods industry has never been easy. The involvement of many stakeholders creates a multitude of opportunities for even the most promising innovations to go off track. And competing priorities can cause organizations to lose sight of the initial product and business goals. The COVID-19 pandemic has further complicated the development of consumer products. Consumer beliefs and preferences will continue to evolve rapidly, forcing companies to redouble their efforts to embed the voice of the consumer throughout the product-development process. As Steve Jobs famously noted, You cant just ask customers what they want and then try to give that to them. By the time you get it built, theyll want something new. In addition, companies must continue to prioritize innovation even as the pandemic puts pressure on budgets. Such investments can bring significant benefits: McKinsey analysis has found companies that invest in innovation during a crisis outperform the competition on market capitalization by 10 percent investing in innovation after a crisis gives them a 30 percent advantage. Last, companies will have to rethink innovation and collaboration in remote-working team structures. This dynamic will place more importance on roles and skill sets that involve orchestrating and integrating productdevelopment processes. In our work with consumer-goods companies, we have identified a critical need for a product manager to connect these many stakeholderssomeone who is ultimately accountable for delivering consumer and business outcomes. The consumer-goods industry can learn from the evolution of product management in the technology industry and empower product managers to play this critical role. Many organizations will rapidly test new products and ideas to meet changing market demands, but this complex operating environment increases the urgent need for a sophisticated product-management function. A modern product manager acts as a catalyst and objective arbiter of competing interests and perspectives in the product-development process to facilitate both designing the right thing and designing the thing right. The consumer-goods industry in many ways defined the notion of a product that addresses a specific consumer need and creates value. Tech companies built upon this productand consumer-centric philosophy and created new ways to bring together different sources of insights to build world-class products. The modern product manager emerged from this evolution as a central role. In our work on strategic product efforts for consumer-goods companies in recent years, we have found that specially appointed product leaders made a significant impact. We believe consumer-goods companies can gain insights from how the product-manager role has emerged in the tech industryand, increasingly, in digital companies outside of techto solve persistent challenges in consumer-product development. Traditional tech product managers focused primarily on execution and were evaluated by the on-time delivery of engineering projects. Today, however, tech and digital product managers are increasingly the mini-CEO of the product. They play a variety of roles, using a broad base of knowledge to make trade-offs, and convene cross-functional teams to align diverse functions. Product managers in the consumer-goods industry tend to fit a more traditional profile, with a focus on project management and tactical execution. Brand managers often act as product owners, but rarely play the central integration role that we believe is crucial to propelling innovation. Consumer-goods companies face a unique set of challenges. For example, their products tend to require much quicker response to consumer trends and needs, and often require localization, which is unlike tech companies that have longer product lifespans and largely worldwide solutions. Yet several trendssuch as the growing importance of data in decision making, an increased focus on consumers and design, and the evolution of product-development methodologiessuggest that much can be gained by considering how consumerproduct managers can evolve. Consumer-goods companies can learn from the evolution of product management in the technology industry to strengthen and accelerate their own product development. By taking a balanced view of the critical development lenses throughout, companies will be poised to achieve the elusive breakthrough innovation that both resonates with markets and supports key business objectives.

Source: (Loughlin, Woodruff and Salazar, 2023)

1.2 McKinseys analysis has found companies that invest in innovation during a crisis outperform the competition on market capitalization by 10 percent investing in innovation after a crisis gives them a 30 percent advantage. Considering this statement, examine the role of operations managers in product development and provide recommendations for strategies that can be implemented to enhance innovation in the consumer goods industry. Make use of relevant frameworks. (20 marks)